The Philippines’ pre-need industry swells 8.2% YoY in Q3

Its expansion is attributed to the heightened sales of pre-need plans during the period.

In the third quarter of 2023, the total premium income collected by pre-need companies in the Philippines reached ₱16.7b ($300m), marking an 8.28% year-on-year (YoY). This growth is attributed to the heightened sales of pre-need plans during the first three quarters of the year, with close to 600,000 plans sold—an increase of 12.83% YoY. 

Notably, memorial plans constitute the majority of the pre-need plans sold.

The pre-need industry returned to profitability during this period, reporting a total net income of ₱1.8b ($32m). 

This positive turnaround follows a net loss of ₱7.1b ($130m) incurred in the third quarter of the previous year, primarily stemming from high net losses associated with benefit payments for pre-need policies.

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In terms of the ability to meet benefit claims, pre-need companies bolstered their surplus in trust funds. As of the third quarter, the investment in trust funds amounted to ₱124.2t ($2.23t) surpassing pre-need reserves, which stood at ₱119.1t ($2.14t). 

This resulted in a substantial surplus of ₱5.1b ($92m), leaping 380% YoY.

Examining the financial stability of pre-need companies, the total net worth of the industry reached ₱21.7b ($390m) —a 42.53% surge from the third quarter of the previous year. 

The industry also saw a 9.76% increase in total assets, reaching ₱147.9b ($2.7b), with four pre-need companies experiencing a minimum 10% growth in their total assets.

It is important to note that the provided figures are based on the Insurance Commission's data for the third quarter of 2023, compiled from financial submissions of eighteen pre-need companies holding existing licenses or with pending applications for license renewal.

(₱1.00 = $0.018)